CONGRESSIONAL STATEMENT OF RALF MUTSCHKE
Assistant Director, Criminal Intelligence Directorate International Criminal Police
Organization - Interpol General Secretariat Committee on the Judiciary Subcommittee on
Crime December 13, 2000 "The Threat Posed by the Convergence of Organized Crime,
Drugs Trafficking and Terrorism"
Good morning, Mr.
Chairman and members of the subcommittee. I would like to thank you for the opportunity of
addressing you here today on the threats posed by the increasing links between terrorist
and more traditional criminal activities. I would like to start by exposing the issues and
emerging trends that Interpol considers significant or potentially significant in the
foreseeable future. After having done so, I would like to share some remarks on the
threats posed by this problem and recommendations to combat it, before answering your
questions.
Links between Organized Crime and
"Traditional" Terrorist Groups
Structural links between political terrorism and traditional criminal
activity, such as drugs trafficking, armed robbery or extortion have come increasingly to
the attention of law enforcement authorities, security agencies and political decision
makers. There is a fairly accepted view in the international community that in recent
years, direct state sponsorship has declined, therefore terrorists increasingly have to
resort to other means of financing, including criminal activities, in order to raise
funds. These activities have traditionally been drug trafficking, extortion/collection of
"revolutionary taxes", armed robbery, and kidnappings. The involvement of such
groups as the PKK, LTTE, and GIA in these activities has been established.
I would like to draw the particular attention of the Committee to the
Groupe Islamique Arme (GIA), considering the events of December last year. On 14 December
1999, Ahmed Ressam, was arrested near Port Angeles, Washington State, while trying to
enter the United States from Canada. He was in possession of a timing device, explosive
materials and false identification documents. Ahmed Ressam is known to have shared a
Montreal (Canada) apartment with Said Atmani, a known document forger for the GIA. It has
been established that before Ressam attempted to enter the US, he was in the company of
Abdelmajid Dahoumane in Vancouver (Canada) for a 3 to 4 week period. An Interpol Red
Notice was issued regarding the latter. The investigation has revealed links between
terrorists of Algerian origin and a criminal network established in Montreal and
specializing in the theft of portable computers and mobile telephones. The group in
Montreal was in contact with individuals involved in terrorist support activity in France,
and with several Moudjahidin groups who are active in Bosnia.
Subsequent to the arrest of Ressam, the Montreal police arrested twelve
persons who were committing theft of valuable goods in cars in the Montreal downtown area.
The proceeds of these criminal activities were sent to an international network with links
to France, Belgium, Italy, Turkey, Australia and Bosnia.
The events in Canada and the United States should be seen in a wider
perspective. Indeed, intelligence shows that several Algerian terrorist leaders were
present at a meeting in Albania, which could also have been attended by Usama bin Laden,
who was believed to be in Albania at that time. It was during this meeting that many
structures and networks were established for propaganda and fund raising activities, and
for providing Algerian armed groups with logistical support. The arrest at the Canada-US
border in December 1999 may indicate that the Algerian terrorists are prepared to take
their terrorism campaign to North America.
The GIA is a very active and deadly terrorist organization operating
mainly in Algeria but which has also mounted several terrorist attacks in France,
including the hijacking of an Air France jetliner in 1994 and a bombing campaign in 1995.
Their aim is the overthrow of the Algerian Secular Government and its replacement with an
Islamic state. They have developed large scale support and financing activities in Europe
and other parts of the world. An analysis recently conducted at the Interpol General
Secretariat has revealed GIA involvement in a number of criminal activities in several
European countries. Although the information received is fragmented, it has been
established that GIA support networks are involved in extortion, currency counterfeiting,
fraud, and money laundering.
The above examples concern traditional terrorist groups with a
well-defined political ideology who are only involved in organized crime on a secondary
level. However, two of the main emerging threats today seem to emanate, on the one hand,
from more hybrid groups who operate in highly unstable, often war-torn countries or
regions, and, on the other hand, loose alliances and cooperation among different, already
existing transnational criminal organizations. Albanian crime groups are highly
representative of this trend.
Albanian Organized Crime Groups.
Albanian organized crime groups are hybrid organizations, often
involved both in criminal activity of an organized nature and in political activities,
mainly relating to Kosovo. There is certain evidence that the political and criminal
activities are deeply intertwined. Also, it has become increasingly clear that Albanian
crime groups have engaged in significant cooperation with other transnational crime
groups.
Several extraneous factors explain the current, relatively strong,
position of Albanian organized crime:
1. Concerning Albanian organized crime in the United States, the 1986
break-up of the "Pizza connection" made it possible for other ethnic crime
groups to "occupy" the terrain which had until then been dominated by the
Italians. For Albanians this was especially easy since they had already been working with,
or mainly for, Italian organized crime.
2. Due to a highly developed ethnic conscience - fortified by a Serb
anti- Albanian politics in the 80’s and 90’s, Albanians, particularly Kosovars, have
developed a sense of collective identity necessary to engage in organized crime. It is
this element, based on the affiliation to a certain group, which links organized Albanian
crime to Panalbanian ideals, politics, military activities and terrorism. Albanian drug
lords established elsewhere in Europe began contributing funds to the "national
cause" in the 80’s. From 1993 on, these funds were to a large extent invested in
arms and military equipment for the KLA (UCK) which made its first appearance in 1993.
3. From 1990 on, the process of democratization in Albania has resulted
in a loss of state control in a country that had been totally dominated by the communist
party and a system of repression. Many Albanians lacked respect for the law since, to
them, they represented the tools of repression during the old regime. Loss of state
structures resulted in the birth of criminal activities, which further contributed to the
loss of state structures and control.
4. Alternative routing for about 60% of European heroin became
necessary in 1991 with the outbreak of the war in Yugoslavia and the blocking of the
traditional Balkan route. Heroin was thus to a large extent smuggled through Albania, over
the Adriatic into Italy and from there on to Northern and Western Europe. The war also
enabled organized criminal elements to start dealing arms on a large scale.
5. Another factor which contributed to the development of criminal
activities, is the embargos imposed on Yugoslavia by the international community and on
the F.Y.RO.M. by Greece (1993-1994) in the early 90’s. Very quickly, an illegal
triangular trade in oil, arms and narcotics developed in the region with Albania being the
only state not hit by international sanctions.
6. In 1997, the so-called pyramid savings schemes in the Albanian
republic collapsed. This caused nation-wide unrest between January and March 1997, during
which incredible amounts of military equipment disappeared (and partly reappeared during
the Kosovo conflict): 38,000 hand-guns, 226,000 Kalashnikovs, 25,000 machine-guns, 2,400
anti-tank rocket launchers, 3,500,000 hand grenades, 3,600 tons of explosives. Even though
organized crime groups were probably unable to "control" the situation, it seems
clear that they did profit from the chaos by acquiring a great number of weapons. Albanian
organized crime also profited from the financial pyramids which they seem to have used to
launder money on a large scale. Before the crash, an estimated 500 to 800 million USD seem
to have been transferred to accounts of Italian criminal organizations and Albanian
partners. This money was then reinvested in Western countries.
7. The Kosovo conflict and the refugee problem in Albania resulted in a
remarkable influx of financial aid. Albanian organized crime with links to Albanian state
authorities seems to have highly profited from these funds. The financial volume of this
aid was an estimated $163 million. The financial assets of Albanian organized crime were
definitely augmented due to this situation.
8. When considering the presence of Albanians in Europe, one has to
keep in mind the massive emigration of Albanians to Western European countries in the
90’s. In 2000, estimations concerning the Albanian diaspora are as follows:
United States and Canada: 500,000
Greece: 500,000
Germany: 400,000
Switzerland: 200,000
Turkey: 65,000
Sweden: 40,000
Great Britain: 30,000
Belgium: 25,000
France: 20,000
For those emigrants to EU countries or
Switzerland, the temptation to engage in criminal activities is very high as most of them
are young Albanian males, in their twenties and thirties, who are unskilled workers and
who have difficulties finding a job. For Italian organized crime, these Albanians were
ideal couriers in the drug trafficking business running through Albania as they were able
to circumvent the area border patrols after the outbreak of the war in Yugoslavia. Many of
them came into contact with Albanian organized crime through Albanian emigre communities
located throughout Western Europe. This gave an impetus to the dispersion and
internationalization of Albanian criminal groups.
The typical structure of the Albanian Mafia
is hierarchical. Concerning "loyalty", "honor" and clan traditions,
(blood relations and marriage being very important) most of the Albanian networks seem to
be "old-fashioned" and comparable to the Italian Mafia networks of thirty or
forty years ago. Infiltration into these groups is thus very difficult. Heroin networks
are usually made up of groups of fewer than 100 members, constituting an extended family
residing all along the Balkan route from Eastern Turkey to Western Europe. The Northern
Albanian Mafia which runs the drug wholesale business is also known by the name of
"The Fifteen Families."
Regarding cooperation with other
transnational criminal groups, the Albanian Mafia seems to have established good working
relationships with the Italian Mafia. On the 27th of July 1999 police in Durres (Albania),
with Italian assistance arrested one of the godfathers of the "Sacra Corona
Unita", Puglia’s Italian Mafia. This Albanian link seems to confirm that the Sacra
Corona Unita have "officially" accepted Albanian organized crime as a
"partner" in Puglia/Italy and delegated several criminal activities. This might
be due to the fact that the Sacra Corona Unita is a rather recent phenomenon, not being as
stable nor as strong as other Mafias in Italy. Their leaders might have decided to join
forces rather than run the risk of a conflict with Albanian groups known to be extremely
violent. Thus in certain areas of Italy, the market for cannabis, prostitution and
smuggling of illegal immigrants is run mainly by Albanians. Links to Calabria’s Mafia,
the "Ndrangheta", exist in Northern Italy. Several key figures of the Albanian
Mafia seem to reside frequently in the Calabrian towns of Africo, Plati and Bovalino
(Italy), fiefs of the Ndrangheta. Southern Albanian groups also seem to have good
relationships with Sicily’s "Cosa Nostra", which seems to be moving steadily
into finance and money laundering, leaving other typical illegal activities to other
groups. Close relationships also exist with other criminal groups active along the Balkan
route, where Turkish wholesalers, Bulgarian and Romanian traffickers are frequent business
partners. There are also indications that a South American cartel has become active in
Albania through Albanian middlemen, in order to place more cocaine on the European market
The heavy involvement of Albanian criminal
groups in drugs trafficking, mainly heroin is proven. Currently, more than 80% of the
heroin on the European market has been smuggled through the Balkans, having mainly been
produced in Afghanistan and traveled through Iran and Turkey or Central Asia. In the
Balkan region, two routes seem to have replaced the former traditional route, disrupted by
the Yugoslavian conflict: one Northern route running mainly through Bulgaria, then Romania
and Hungary and one Southern route running from Bulgaria through F.Y.R.O.M., the Kosovo
region and Albania. An average of more than a ton of heroin and more than 10 tons of
hashish are seized along those Balkan routes each year. According to DEA estimations,
between 4 and 6 tons of heroin leave Turkey each month bound for Western Europe, traveling
along the Balkan routes.
Albanian trafficking networks are becoming
more and more powerful, partly replacing Turkish networks. This is especially the case in
several German speaking countries, Sweden and Norway. According to some estimations,
Albanian networks control about 70% of the heroin market today in Switzerland, Germany,
Austria and the Scandinavian countries. According to analyses of the Swedish and Norwegian
police, 80% of the heroin smuggled into the countries can be linked to Albanian networks.
In 1998, Swiss police even estimated that 90% of the narco-business in the country was
dominated by Albanians. Throughout Europe, around 40% of the heroin trade seems to be
controlled by Albanians. Recent refugees from the Kosovo region are involved in street
sales. Tensions between the established ethnic Albanians and newcomers seem to exist,
heroin prices having dropped due to their arrival and due to growing competition in the
market.
Albanian networks are not only linked to
heroin. In the Macedonian border region, production laboratories for amphetamine and
methamphetamine drugs seem to have been set up. Currently, these pills are destined for
the local market. Cannabis is grown in Albania and cultivation seems to have become more
and more popular, especially in the South. Annual Albanian marijuana revenue is estimated
at $40 million. In 1999, cannabis plantations existed in the regions of Kalarat (about 80
kilometers from Vlore/Albania) and close to Girokaster in the regions of Sarande, Delvina
and Permetti. Albanian cannabis is mainly sold on the Greek market. In order to transport
the drugs to Greece, Albanian crime groups work together with Greek criminals.
Albanian criminals are also involved in the
traffic of illegal immigrants to Western European countries. It is part of international
trafficking networks, which not only transport Albanians, but also Kurds, Chinese and
people from the Indian subcontinent. The Albanian groups are mainly responsible for the
crossing of the Adriatic Sea from the Albanian coast to Italy. Departures mainly take
place from Vlore, some of them from Durres or even from Ulcinj in the South of Montenegro.
By the end of 1999, the crossing costs about $1,000 USD for an adult and $500 USD for a
child. It is interesting to notice that some illegal immigrants had to pay for their
journey only once in their home country (e.g. $6,000 in Pakistan), but that the
nationality of the trafficking groups changed as they moved along. This implies that
Albanian groups are only a part of international distribution networks. In 1999,
approximately 10,000 people were smuggled into EU countries via Albania every month. The
Italian border patrol intercepted 13,118 illegal immigrants close to the Puglian coast
from January until July 1999. It estimated arrivals only in this coastal region at 56,000
in 1999. For the Albanian crime groups, illegal immigration - even though it can not be
compared to the narco-business - is an important source of income, bringing in an
estimated fifty million USD in 1999.
Immigration is not only a source of income,
it is also very important in order to create networks in foreign countries and thus create
bridgeheads for the Albanian Mafia abroad. Reports indicate that of the people admitted
into Western European or North America as refugees during the Kosovo conflict, at least
several had been carefully chosen by the Albanian Mafia to stay in the host country and
act as a future liaison for the criminal networks.
Trafficking in women and forced prostitution
seem to have become much more important for Albanian organized crime in 1999, with
thousands of women from Kosovo having fled to Albania during the armed conflict in the
region. About 300,000 women from Eastern European countries work as prostitutes in Europe.
More and more seem to be "organized" in Albanian networks that are not only
limited to ethnic Albanian prostitutes, but also comprise women from Romania, Bosnia,
Moldova, Russia, etc. The pimps often pretend to be Kosovars in order to have the status
of a political refugee, even though many of them come from Albania. Some seem to control
the "business" from abroad. Belgium, in particular, seems to be the seat of
several leaders of the trafficking networks. In 1999, ten people linked to Albanian crime
were shot in Brussels.
Finally, Albanian criminal groups frequently
engage in burglaries, armed robberies and car theft in Europe and the United States.
There might still be links between
political/military Kosovar Albanian groups (especially the KLA) and Albanian organized
crime. Of the almost 900 million DM which reached Kosovo between 1996 and 1999,
half was thought to be illegal drug money. Legitimate fundraising activities for
the Kosovo and the KLA could have been be used to launder drug money. In 1998, the U.S.
State Department listed the KLA as a terrorist organization, indicating that it was
financing its operations with money from the international heroin trade and loans from
Islamic countries and individuals, among them allegedly Usama bin Laden. Another link to
bin Laden is the fact that the brother of a leader in an Egyptian Djihad organization and
also a military commander of Usama bin Laden, was leading an elite KLA unit during the
Kosovo conflict. In 1998, the KLA was described as a key player in the drugs for arms
business in 1998, "helping to transport 2 billion USD worth of drugs annually into
Western Europe". The KLA and other Albanian groups seem to utilize a
sophisticated network of accounts and companies to process funds. In 1998, Germany froze
two bank accounts belonging to the "United Kosova" organization after it had
been discovered that several hundred thousand dollars had been deposited into those
accounts by a convicted Kosovar Albanian drug trafficker.
The possibility of an Albanian/Kosovar drugs
for arms connection is confirmed by at least two affairs in 1999:
an Italian court in Brindisi (Italy)
convicted an Albanian heroin trafficker who admitted obtaining weapons for the KLA from
the Mafia in exchange for drugs.
An Albanian individual placed orders in the
Czech Republic for light infantry weapons and rocket systems. According to Czech police
sources, the arms were bound for the KLA.
Each KLA commander seems to have had funds
at his disposal in order to be able to pay directly for weapons and ammunition for his
local units’ need.
It is difficult to predict the further development of Albanian
organized crime. Being a recent phenomenon, its stability is difficult to estimate.
Nevertheless, future threats are realistic given the ruthlessness and lack of scruples
displayed by Albanian crime groups, the international links which already exist, the
professionalism which characterizes most of their activities and the strong ties created
by ethnic Albanian origins. Moreover, the strong position of Albanian crime groups in
Kosovo, F.Y.R.O.M. and the Albanian republic itself, is definitely a cause of concern to
the international community, especially when one takes into account the geo-political
instability in the region and the presence of a UN peacekeeping force.
The Links between Drug Trafficking and Terrorism in Central Asia.
The breakup of the Soviet Union and its transition to a market based
economy continues to have a major impact in Central Asia and Eastern Europe. Many
countries in these regions continue to have economic and social problems relating to the
major changes that occurred in 1991. Central Asian criminal organizations have taken
advantage of these unstable conditions to become more active in such illegal activities as
drug trafficking and other smuggling activities, while becoming ever more powerful. As a
result of their domestic trafficking activities, drug dealers and other criminal
organizations have developed transnational and international criminal connections, further
spreading the flow of drugs and becoming increasingly involved in more serious criminal
activity.
A significant part of the drug trafficking activity in the area is
taking place in conjunction with terrorist activity. Terrorist groups active in Central
Asia are op ponents of the democratic, secular societies which are in the process of being
established. Over the last two years, they were responsible for car bombings, suicide
bombings, massacres of innocent civilians, tourists and attacks against multi-story
buildings, which resulted in massive damage and casualties in Central-Asia as well as
neighboring countries. This type of terrorism has been used against the secular regimes in
Central Asian and neighboring countries.
The main terrorist movement in the area, but not the only one, is the
Islamic Movement of Uzbekistan (IMU). The IMU is a religious extremist coalition of
terrorists and sympathizers from Uzbekistan and other Central Asian countries claiming to
be acting under the guise of Islam and opposed to the secular government of the Republic
of Uzbekistan. IMU`s goal is to establish an Islamic State in Uzbekistan and other Central
Asian countries. This group also promulgates religious and extremist propaganda including
anti-western rhetoric aimed at spreading the idea of overthrowing the constitutional
government in the republic. The IMU is responsible for six car bomb attacks on 16 February
1999, that resulted in the deaths of 16 people and serious injuries of 128 others in
Tashkent. The car bombs exploded within minutes of each other, outside Uzbekistan`s
government headquarters and several other buildings in an assault apparently aimed at
President Islam Karimov. We believe several suspects are currently located in Western
Europe but are claiming political asylum in those countries.
Despite the political and ideological agenda of the IMU, this movement
is not exclusively terrorist in nature, rather more of a hybrid organization in which
criminal interests often take priority over "political" goals. IMU leaders have
a vested interest in ongoing unrest and instability in their area in order to secure the
routes they use for the transportation of drugs. Afghanistan produces around 75 % of the
world’s heroin supply (For 2000, the production of opium, then refined into heroin, was
3275 tons). Due to successful anti-drugs campaigns in Iran and Pakistan, traffickers were
forced to transit drugs through Central-Asia, in order to reach Russia and Europe. At the
same time, there has been an increase in demand for drugs on the Russian market.
Approximately 60 % of the narcotics coming out of Afghanistan are now transiting through
Central-Asia. The trafficking of such huge quantities implies the need to constantly find
new routes, and it is also evident that an increase of efficiency of law enforcement in
these countries, resulting from a stable political climate, would present a significant
threat to the IMU’s interests in drug trafficking. The interest of the latter in this
profitable sector is rather large, according to some estimations IMU may be responsible
for 70 % of the total amount of heroin and opium transiting through the area.
In Afghanistan, the radical Islamic Taliban Militia controls over 80
percent of the country’s territory and over 95 percent of the opium poppy cultivating
area. Reports indicate that opium production provides the Taliban with income through the
taxation of opium and heroin labs, and also gives them political leverage.
Strategic Alliances and International Activities of Eastern-European
Organized Crime
Crime groups emanating from the former Communist countries of
eastern and central Europe and the republics of the former Soviet Union pose a deadly
threat internationally as the number of crime syndicates rises steadily.
The G8 Law Enforcement Projects Sub-Group on Eastern European Organized
Crime began an initiative to gather information on specific organized crime targets and/or
organizations which were of interest to their members. At the outset they recognized that
Interpol was the only organization with a centralized international database and which
also had the capacity and potential to collate and analyze the information. In response to
a request from this G8 Sub-Group, Interpol made a proposal to serve as an "indices
system" to oversee the collection and analysis of the information on these crime
groups. Project Millennium now serves our member countries by providing a specialized
database, by collating and storing information, by producing analytical reports for use in
current investigations and by assisting countries in the exchange of information on East
European/Russian organized crime.
Project Millennium is a ‘Pilot Project’ for Interpol and is a
working example of how the organization has become a ‘global coordinator’ and ‘value
added service provider’ for the world’s law enforcement community.
In terms of trends and threats, Interpol has clearly identified that
the pervasive criminality that for so long festered within the boundaries of the former
Soviet Union has now manifested itself in all corners of the globe. In contrast to the
Communist period, modern organized crime in Eastern Europe and the former Soviet Union has
spread well beyond the old European borders and quickly transformed the phenomenon into an
urgent transnational issue.
Interpol information indicates that former USSR/Eastern European
organized crime groups are now active and their influence is growing in all continents. An
unusual aspect is that these crime syndicates have formed alliances of convenience and are
willing to cooperate or make business arrangements with other organized crime groups, such
as the LCN, the Colombian cartels, Italian mafias, and other international traditional
criminal adversaries specializing in drug trafficking, prostitution rings, money
laundering, and weapon smuggling.
Eastern European/Russian crime syndicates are now laundering money on a
grand scale throughout the world. States with strict banking secrecy laws are particularly
attractive to Eastern European and former USSR crime groups. In particular, many crime
groups are seizing on loose financial regulations in foreign states to launder large
amounts of illicit profits through foreign banks and business structures. One particular
suspect from the British Channel Islands came to our attention due to the fact that his
name appeared in a number of cases as the director or officer of numerous businesses
linked to Eastern European related crime groups. It is claimed that the subject held a
world record by holding over 2,400 directorships at one time. Our investigations into this
one person demonstrated how the offshore business services are widely used by criminal
enterprises. In these types of cases, Interpol plays an important role by collecting
information from all over the world and highlighting the common suspects, trends and modus
operandi. Areas and countries with these loose financial regulations span from islands in
the South Pacific and Caribbean, across Europe and, in the United States. We see many
leads from other countries inquiring about East European based companies incorporated in
Delaware, Wyoming and Montana.
One analysis report completed by Interpol in Project Millennium
revealed how one of the leaders of the "Chechenskaya" criminal group, with three
of his brothers as well as other accomplices, transferred money received from criminal
activities in Russia to western European countries through offshore zones. One of the
companies used for these money transfers was "Benex International" mentioned in
the "Bank of New York" reports. The members of this group are involved in
extortion, murder, armed robberies, weapons smuggling, and money laundering. This criminal
leader is wanted by Interpol Moscow and has an Interpol Red Notice for murder. This
investigation involves at least 12 countries (Switzerland, Hungary, Australia, Ireland,
Russia, Bulgaria, Nauru, Kazakhstan, Austria, Germany the UK and the USA).
Another very interesting trend which we have seen for several years is
the interest shown in Africa by Russian and Eastern European crime groups. Information we
have received from Africa and elsewhere shows that many leading crime figures are
traveling to African countries and some have shown an interest in setting up operations in
these countries. We are aware, for example, of a meeting of several significant leaders
from Eastern Europe in South Africa in 1996. One of the activities which many of these
criminals are involved in is arms trafficking and the subsequent money laundering of the
proceeds from that traffic.
One Russian-born subject who is suspected of arms trafficking into
several African countries, was the owner of a private bank in Switzerland and the
administrator of an aviation company. Other aviation companies we are tracking are
incorporated in Central Asian countries but have significant links to certain Arab
countries. A leading Bulgarian criminal who is a close associate of an important Eastern
European crime figure has close connections with the firearms industry in Eastern European
and has had significant dealings with terrorist groups and criminals operating in African
countries. Interpol is attempting to track the travel activities of these criminals in an
effort to supply valuable information and connections to investigators.</MESSAGE>
Strategic Alliances between Crime Groups: the Colombian Nexus
The strategies devised by Colombian drug cartels merit a discussion in
further detail. Over the years, these criminal entities have formed numerous alliances
with other criminal groups in order to extend the scope of their illicit business. Their
rational, and, incidentally, highly successful strategic decision making has led to
providing them with a more global reach. The presence of terrorist groups in the area
explains the obvious link between drugs and the arms trade in that region.
Generally speaking, the formation of alliances can be viewed as a
response by a particular firm or company to overcome its own limitations. With the
emergence of global markets, alliances are becoming a necessity for almost any business.
Each firm has something that the other needs or wants, such as knowledge of a certain
market or an established distribution network. Drug cartels, although an illegitimate
business, are forming alliances with other organized criminal groups around the world to
extend their operations and conquer new markets.
In order to smuggle their illicit products into the U.S., Colombian
drug cartels began forming alliances with Mexican groups, who have a well-developed
smuggling infrastructure for transporting drugs across the vast border with the United
States. As Mexicans began to charge more for their services, Colombians established
relationships with various Dominican, Jamaican, Puerto Rican, and African-American groups
which act as smugglers and retailers for Colombian wholesale cocaine. Colombians have also
formed an alliance with some of the Nigerian drug trafficking groups based on product
exchange. In the early 1990s, Nigerian groups supplied heroin to Colombian drug
traffickers in exchange for cocaine. Colombians were able to develop their own heroin
market, while Nigerians started selling cocaine in Western Europe. During the late 1980s
and early 1990s, an important alliance was formed between Colombian drug cartels and the
Sicilian Mafia. Since the cocaine market in the U.S. was saturated, and because cocaine
could be sold with higher profit margins in Europe, Colombians wanted to enter the
European drug market. The Cosa Nostra’s well established heroin network was easily
applicable to cocaine. In addition, the Sicilians had an excellent knowledge of European
conditions and were able to neutralize law enforcement officials through bribery and
corruption more effectively than the Colombians. From the Sicilian perspective, the
alliance with Colombians was an opportunity to regain part of the market that had been
lost to Chinese heroin traffickers. In recent years, South American drug cartels have been
forming alliances with East European/Russian Organized Crime Groups in order to support
and diversify their operations. East European groups have offered drug cartels access to
sophisticated weapons that were previously not available. Helicopters, surface-to-air
missiles, rocket-propelled grenades, and even submarines are on the drug cartels’
"shopping list." The East European groups provided new drug markets in Russia,
the former Soviet Republics, and Eastern Europe, while consumption was decreasing in the
U.S. In 1993, Russian police intercepted a ton of South American cocaine which had been
shipped to St. Petersburg by one Russian crime syndicate working with a Colombian drug
cartel. In another example, a Russian crime leader was arrested in January 1997 in Miami
by U.S. agents for the exportation of cocaine from Ecuador to St. Petersburg (Russia) and
then to the United States. In exchange for these services, drug cartels pay for
transactions with high quality cocaine. East European/Russian crime syndicates and corrupt
military officers are supplying sophisticated weapons to Colombian rebels in exchange for
huge shipments of cocaine. Although the Revolutionary Armed Forces of Colombia (FARC)
receives most of the arms, some of them are distributed to Hezbollah factions.
The financing of the two main terrorist organizations operating in
Colombia, namely the FARC and the National Liberation Army (ELN), originates from several
sources, with the most important one being the drug trafficking. A "tax system"
ran by FARC collects $20 USD for each kilo of base cocaine produced, $30 USD for each kilo
of crystal, and $2,500 USD for each use of a landing strip. Approximately 61% of FARC's
operational area is also an area for cultivation and production of cocaine. The guerrilla
members also protect the laboratories belonging to the narco-traffickers and this
protection is provided in exchange for financial compensation. The largest amount,
approximately $515 million dollars, was raised by Colombia's oldest guerrilla
organization, FARC. The smaller National Liberation Army earned approximately $380 million
dollars. These groups raised approximately $910 million dollars from abductions, extortion
and drug trafficking in 1997. In the last four years, these groups’ earnings soared by
130%, which surpasses the combined incomes of Colombia's seven largest firms. Since 1996,
the UNHCR estimates that more than 800,000 people have been displaced in Colombia as a
result of guerrilla warfare. In an attempt to negotiate peace with guerrilla groups, the
Colombian government granted the ELN a demilitarized zone in the northeastern provinces of
Antioquia and Bolivar in April 2000. This is the second guerrilla safe-zone created in
Colombia. The FARC’s own demilitarized zone, which lies in the jungles in the south, was
created in 1998.
In the South American context, it is also worthwhile to mention Peru
and Argentina. Like Colombia, Peru is combating guerrilla groups in the Andean jungles.
The main guerrilla group is the "Sendero Luminoso" (Shining Path), led by Oscar
Ramirez, also known as "Comrade Feliciano." In order to finance their operations
and terrorist attacks, they often resort to drug production and smuggling. In May 1997, a
joint action by the Peruvian military and police resulted in the capture of several
leaders of the Shining Path. The Shining Path operates in the Apurimac valley, the second
largest coca growing area in Amazonia. The increasing poverty in the region allows the
guerrilla group to recruit young people between the ages of 14 and 18 and enlarge the
scope of their activities. The rebels suffered a setback in their operations, however,
when one of their leader, Oscar Ramirez Durand, was arrested in 1999.
It appears that Argentina is becoming a major money laundering center
for organized criminal groups from Colombia and Mexico, and recently there appears to be
activity from various East European/Russian organized crime groups. Since Argentina does
not yet have an anti-laundering body, the total amount laundered annually is not known.
According to a report by the International Monetary Fund (IMF), an estimated $6 billion
dollars are laundered in Argentine banks each year. According to the Argentine federal
police, approximately $5 billion came from Paraguay to be laundered in 1998. Allegedly,
the money is usually channeled "through front companies in Uruguay, then through
banks in the Caribbean, and finally to Europe and the United States".
Finally, the area called the "Triple Border", where
Argentina, Brazil, and Paraguay meet is known for arms trafficking, vehicle theft,
counterfeit currency, forged documents, as well as for being a refuge for Latin American,
Lebanese, Russian, Chinese, and other criminal and terrorist organizations. It is not
clear if the Hezbollah figures among these terrorist groups, but Islamic fundamentalists
are suspected of having committed two terrorist attacks in Argentina : in 1992, a car bomb
destroyed the Israeli embassy building in Buenos Aires and in 1994 another car bomb attack
was directed against the "Mutual Association". These investigations are still
ongoing and Interpol channels have been used for the exchange of information in the
framework of these cases. To provide an idea of the scope of criminal activity in this
area, a former President of the Brazilian Central Bank stated in 1999, that approximately
$18 million USD are laundered daily in the banking agencies of the city of Foz de Iguazu
(Brazil), a city which is located in this region.
The main smuggling routes to Europe originate in Brazil, Ecuador, and
Venezuela. Cocaine is concealed in containers and shipped to Rotterdam (The Netherlands),
Barcelona (Spain), Genoa (Italy), and the ports of some Baltic states. In addition, small
boats transport cocaine from South America to Spain, where drugs are transferred aboard
Spanish fishing boats. Lastly, an air route exists between West Africa and Europe.
However, Spain continues to dominate as the main entrance point for Colombian drugs into
Europe. In 1998, more than 31% of all cocaine seizures in Europe occurred in Spain.
On August 2, 1999, the Spanish authorities seized ten metric tons of Colombian cocaine on
a Russian-owned ship southwest of the Canary Islands. This shipment was the largest
cocaine seizure carried out by European police. In addition, 200 kilograms of heroin were
confiscated.
What appears to be the "forecast" for South America? In the
northern tier - Colombia, Venezuela, Ecuador, Bolivia, and Peru - drug trafficking will
continue to dominate along with insurgence of the guerrilla groups. The abundance of drugs
and oil in the region, as well as guerrilla activities, is a dangerous mixture for
political stability.
Cooperation among Russian and Israeli Criminal Groups in the
Trafficking of Ecstasy
In another look at an emerging drug situation, there has been a
tremendous increase in the production and trafficking of ecstasy to the United States from
Europe, a trend which Interpol brought to the forefront in 1998. It has also increasingly
spread to Australia, South Africa, Asia, and South America. The phenomenal demand for this
drug has created a perfect opportunity for Israeli and Russian organized crime groups to
become heavily involved in the trafficking of this drug, which has proven to be extremely
lucrative. As the production and trafficking of ecstasy continues at an explosive rate, we
are seeing increased involvement of Russian and Israeli criminal organizations as well as
the increased involvement by other international criminal organizations, potentially to
include Colombian and Mexican groups. As the production of this drug spreads to the east,
we can expect Eastern European organizations to take advantage of this situation, which no
doubt will include criminal activity directed towards the United States.
I would also like to seize this opportunity to draw the attention of
the Committee to the relatively recent involvement of Organized Crime in two activities
which have become increasingly important issues for law enforcement authorities, namely
illegal immigration and cigarette smuggling.
Cigarette Smuggling and Organized Crime
According to the British Tobacco Manufacturers’ Association,
cigarette smuggling is now second only to drugs in terms of consumer spending on illegal
activities. An estimated 350 billion cigarettes are smuggled each year, and the number
continues to grow rapidly. As a consequence, governments around the world lose
approximately $16 billion annually in uncollected tax revenues.
Many organized crime groups operate based on kinship, lifelong
friendship, mutual prison experience, or the membership in sects or secret societies like
the Chinese Triads or the Cosa Nostra. However, none of these ties are essential in the
illegal cigarette trade, as is evidenced by the numerous interethnic relations within
smuggling operations and between different levels of the market. The risk of apprehension
for smugglers, wholesalers, street vendors, and consumers is relatively low, due to the
fact that it has not been a priority for law enforcement until very recently, and
sanctions have been relatively light considering the profitability of the business. In
addition, the risk of fraud is limited because, unlike illegal drugs, most cigarettes are
manufactured legally so the question of the quality of the product is almost non-existent.
However, the profitability of the "business," combined with its visibility and
illegality make street vendors of smuggled cigarettes an easy target for extortion and
racketeering by organized criminal groups.
Why are cigarettes such an attractive commodity for organized crime
groups? First, the difference between the duty-free and duty-paid prices are substantial,
thereby allowing smugglers to make profits at relatively low street prices. Second, they
are very easy to handle and transport. For example, a container load of cigarettes carries
a potential tax value of $1.2 million, almost all of which is potential profit for the
smuggler. Third, cigarette smuggling requires a willing market and a good local
distribution network, which have already been established by drug-trafficking
organizations.
Despite considerable investments in anti-smuggling measures by law
enforcement agencies, cigarette smuggling is flourishing around the world. In Europe,
after the collapse of the Soviet Union, already existent smuggling trends in Italy and
Spain served as a model for organized groups in other countries. Smuggling networks
developed in the Balkans when international sanctions were imposed as a result of the war.
In South Africa, there was a surge in cigarette smuggling after the collapse of apartheid
and the lifting of international sanctions. In Colombia, well established drug routes were
easily converted into cigarette-smuggling routes. Interstate cigarette smuggling is one of
the fastest growing crimes in the United States, due to considerable differences in state
tax rates. State taxes on cigarettes currently range between 2.5 cents to $1USD per pack.
In Canada and Great Britain, extremely high cigarette taxes proved to provide the fertile
ground needed for cigarette smuggling to flourish. Similar patterns continue to emerge
around the world, while criminal activities continue to grow. In Colombia, cigarette
smuggling is directly related to money laundering schemes through the so-called
"black market peso exchange." During the exchange, drug-dealers convert U.S.
dollars into clean pesos, while cigarette smugglers buy U.S. dollars in order to purchase
international goods. The U.S. Treasury Department calls this system "the most
dangerous and damaging form of money laundering ever encountered". In Italy, criminal
organizations sign contracts with the tobacco companies and buy enormous quantities of
cigarettes. Some criminal groups are so powerful, they demand that tobacco companies
refrain from selling their products to other criminal organizations. In Germany,
Vietnamese groups dominate the street sale of smuggled cigarettes. With time, they have
evolved from unorganized individuals into highly sophisticated groups controlling the
majority of illegal sales. Along with traditional methods, more elaborate techniques have
evolved for cigarette smuggling into Germany. Non-existent corporations have been
established to purchase duty-free cigarettes with the intention of exporting them to
Eastern Europe. However, before the cargo reaches the border, it is sold to illegal
wholesale dealers. In Britain, the port of Dover has become the center of smuggling
activities, taking advantage of France’s lower tobacco taxes. Tobacco smuggling is a
ruthlessly efficient and highly organized trade which involves some of Britain’s most
vicious criminal gangs, as well as the Eastern European crime groups and the Italian
Mafia. British police estimate that Italian organized criminal groups account for 15% of
the illegal trade, while Eastern European gangs are responsible for 10% of the smuggled
cigarettes in Great Britain. The ferocity of the competition is likely to contribute to
violent confrontations as the gangs compete for control.
Organized criminal groups realize the importance of making smuggling
routes and the structure of transactions as complicated as possible, and employ a great
range of owners in a very short space of time to make police investigations as difficult
as they can. The primary objective is to make the final owner untraceable, and to make the
links between successive owners as ambiguous as possible. The more complicated the route
is, the more difficult it is to uncover.
The port of Antwerp in Belgium and the port of Rotterdam in the
Netherlands serve as major warehouses for imported cigarettes in Europe. The high
concentration of duty-free cigarettes in these ports is likely to generate illegal
activities for the European black market. It is clear why: European guidelines specify
that tobacco duty must make up at least 57% of the selling price for a packet of
cigarettes. From Antwerp, there are two major smuggling routes which lead to Eastern
Europe and the former Soviet Union. The first route transfers cigarettes by road from
Belgium to Switzerland’s free zone, where they are destined for Central and Eastern
Europe. The second route transfers cigarettes from ports to regional airports in Belgium
or the Netherlands. Then, large aircraft fly the cigarettes to their destinations in
Eastern Europe and the former Soviet Union. Eventually, most of the cigarettes return to
the EU, particularly to Germany and Italy. In Germany, cigarettes are smuggled in a vast
number of private cars and small vans, and this phenomenon is described as
"ant-smuggling." In Italy, cigarettes are smuggled by fast boats from the
Republics of the former Yugoslavia and Albania. After they land along the long coastline,
cigarettes are distributed on the Italian market and in other European countries. The
third smuggling route transports cigarettes from Northern European ports to North Africa.
However, when ships are close to the Spanish territorial waters, small fast boats smuggle
cigarettes to the Spanish Coast.
In 1993, a total of 13 million packets were exported into the
principality of Andorra, compared with 1,520 million packets in 1997. It is difficult to
believe that 60,000 inhabitants of Andorra consumed these quantities. A large amount of
cigarettes may have been smuggled back to Great Britain through Spain, France, and
Belgium. Lately, smugglers have used routes through Cyprus and the United Arab Emirates to
cover their activities.
Investigators claim that British American Tobacco (BAT), the world’s
second largest multinational tobacco company, has encouraged tax evasion and cigarette
smuggling as a means of securing a share of the tobacco market and to lure generations of
new smokers in South American countries, especially Colombia. The BAT records show that
cigarettes were shipped from BAT subsidiaries in the U.S., Brazil, and Venezuela to
BAT’s distributors in the free-trade zone in Aruba, an island just off the coast of
Colombia. From Aruba, cigarettes were sold to dealers, who would then bring them to
Maicao, a town in Colombia’s La Guajira region. Maicao was given special customs status
in order to improve the economy in the region. However, many cigarettes were moved from
"duty not paid " zone into the black market in Barranquilla, Colombia.
Another route was used to smuggle cigarettes from Aruba into Colombia.
This time, Panama’s free-trade zone of Colon was used as a staging point into nearby
Turbo (Colombia), which is also a special customs zone. Furthermore, some of the
cigarettes shipped through Aruba into Maicao went back to Venezuela. In addition to South
America, it is alleged that BAT encouraged cigarette smuggling into Asia through one of
its main distributors in Singapore. Cigarettes were then shipped as a part of
"general trade" (duty not paid) to Bangladesh, Pakistan, Thailand, Myanmar,
Philippines, Vietnam, Laos, Afghanistan, and India. Other world smuggling routes exist
from Paraguay into Argentina, from Cambodia and Thailand into Vietnam, and through Hong
Kong into China.
Traffic in Human Beings and Organized Crime
According to the International Organization of Migration (IOM), there
are currently from 20 to 40 million irregular migrants in the world of a total of 130
million international migrants. At any given time, about 4 million illegal migrants are on
the move. An estimated 100,000 Chinese are smuggled abroad every year, mainly from the
Fujian province in the south where in some villages up to 10 % of the population have
emigrated over the last years. Some sources describe today’s illegal migration as
essentially being a Chinese problem, authorities in Hong Kong (China) even estimating that
currently nine out of ten illegal migrants world-wide are ethnic Chinese. According to the
U.S. Immigration and Naturalization Service (INS), up to 10,000 Chinese illegal immigrants
could have reached American shores in 1999 by boat, five times more than in 1998. INS
employees and the Pacific Forum in Hawaii estimate possible illegal immigration from China
to the United States at 100,000 illegal immigrants per year (which would contradict the
IOM figures mentioned above). The official INS estimates speak of about 30,000 illegal
Chinese aliens. In Australia, unauthorized arrivals by sea have jumped from 157 in 1998 to
3,700 in 1999, the immigrants have been primarily Chinese. In Japan, 1,209 illegal Chinese
migrants were apprehended in 1997 and 428 were apprehended from January until June 1998.
Police authorities estimate that the overall number of Chinese who entered Japan in those
years is up to ten times higher. Britain estimates the Chinese influx into the United
Kingdom at over 600 people per month. Chinese migration is stimulated by a strong Chinese
overseas population. In the 1950’s, some 12 million Chinese were living abroad. In 1999,
that number had tripled. Of those 35 million Chinese abroad in 1999, two thirds lived in
Southeast Asia. It is estimated that China is currently home to a "floating
population" ("liudong renkou", without a permanent place of residence and
employment) of 100 million people. Nevertheless, Asian migration is not exclusively linked
to Chinese nationals. Especially within Asia, a Filipino, Indonesian, Bangladesh and
Burmese migration is significant. Malaysia is thus home to over 500,000 Indonesian illegal
immigrants (of a total of about 700,000 illegal immigrants), Thailand to about 600,000
Burmese (of a total of about one million irregular immigrants). In a 1999 IOM report, the
People’s Republic of China, the Philippines, Indonesia and Burma were named as being the
top four source countries of irregular migration world-wide. According to the Filipino
Department of Foreign Affairs, of the approximately 7 million Filipinos working abroad in
1999, 3 million were undocumented workers.
The world-wide profits made by individual smugglers and smuggling
networks for the year of 1999 were estimated to be between $3 and $10 billion USD. Already
in 1994, the profits of Chinese trafficking networks were estimated to attain somewhere
between $2.4 and $3.5 billion USD, while for the year 2000, this number could be as high
as $30 billion USD.
Migrant trafficking is not a homogeneous criminal activity. It does not
only concern the organization of the smugglers but also the role of the migrants. Their
victimization is due primarily to two factors. First of all, the conditions in which they
travel are often inhumane or often outright dangerous, as the high number of mortal
accidents demonstrate. Secondly, the migrant is very often forced to work off his/her
debts due to the costs of transportation. Their work often consists of engaging in illegal
activities linked to the criminal organization responsible for the transportation. If a
migrant escapes from a safe-house or tries to break out of this vicious cycle by leaving
the area in which he is "employed", and recaptured, he is severely punished or
even killed.
One of the biggest problems for the future may be the approximately
40,000 Chinese immigrants who were allowed by former Yugoslav president Slobodan Milosevic
to settle in the area of Vojvodina (Northern part of the Yugoslavian Federation, close to
Hungarian border). These Chinese nationals were provided with Yugoslav citizenship to
attempt to influence the election result in this area. It is believed that these persons
have no intention of staying in this region and, with their Yugoslav passports, they are
allowed to enter the Hungarian territory without a visa. One tragic incident occurred in
June 2000, when 60 of these persons started their last journey from Yugoslav territory
towards United Kingdom. Their journey ended in a hermetically closed refrigerator lorry in
Dover, United Kingdom, where 58 of them suffocated to death.
The problem is not limited to these 40,000 persons. Some international
organizations estimate that another 200,000 Chinese and other nationals presently in
Russia, are waiting their turn for immigration to the West. The international community
estimates that by 2005, a further 270 million people could be removed from China’s
agricultural labor force without affecting production.
Interpol has clear indications of organized crime groups involvement in
every segment of an illegal immigration journey. Often, illegal immigration activity are
linked to drugs smugglers. Links between Chinese and Albanian criminal groups have been
documented, as well as cooperation of Chinese groups with Eastern European organized crime
groups, in order to smuggle immigrants through Russia, Ukraine, the Czech Republic or
Hungary. Hong Kong based 14K triad seems to be linked to trafficking to Japan, but even
those trafficking operations seem to be partly run by other groups or networks formed of
criminals from different ethnic backgrounds. In Japan, the Yakuza’s role in alien
smuggling appears to be growing. This confirms a trend towards linkages between foreign
and domestic organized crime groups. Chinese Snakehead groups are not limited to mainland
China or Hong Kong, but are also based in Taiwan. Snakehead links to other organized crime
groups also exist.
A good example of the interaction between different organized crime
groups is the "Dover case." A Yugoslavian organized crime syndicate organized,
in cooperation with a Hungarian group, the journey from Yugoslavia through Hungary and
Austria, with the final destination the United Kingdom. There was also a Dutch/Turkish
organized crime group involved. The involvement of other ethnic criminal groups which
allowed the illegal immigrants to reach Yugoslavia from China is almost certain.
When considering these factors, it becomes obvious that illegal
immigration is not a question of a few isolated cases of border crossing and smuggling of
people - it is a serious organized crime problem threatening almost all developed
countries around the world. A relatively recent trend is that smuggling networks seem to
focus more and more on Central and South America. Allegedly, as many as 50 members of the
Taiwanese United Bamboo triad are based in Guatemala City to help move illegal migrants to
North America via Mexico and sustain the necessary links to Mexican traffickers. Surinam
is described as being the latest "hot-spot" for people smugglers. There are
about 50,000 ethnic Chinese living there, approximately 10% of the population.
In 1999, the Interpol General Secretariat initiated a project, named
"Bridge" to facilitate a more effective and efficient program for the collection
of information on organized crime groups involved in illegal immigration and the
trafficking of persons. The member countries identified not only the need for Interpol’s
communication system, but also for timely intelligence and specialized analytical
assistance in this field. At Interpol meetings, illegal immigration experts agreed to
prioritize the combat against organized crime groups involved in the smuggling of Asian
migrants, primarily Chinese, because of the highly organized aspect of these groups and
the growing number of active investigations in this area. The objectives of this project
are to collect information on members of groups involved in illegal immigration,
specifically the routes, methods of transportation, safe houses, escorts, forged
documents, and visas utilized by these groups. Emphasis was placed on obtaining
information from active, ongoing investigations with numerous international connections.
It was stressed that if reliable data and information on trafficking routes, the modus
operandi of smuggling organizations, local crime groups utilized, and recruiters, passport
and visa suppliers, escorts, providers of accommodation, couriers, and handlers in
destination countries was received from member countries, then Interpol could assist the
investigations by coordinated activities of police bodies and law enforcement
organizations to successfully dismantle the inter-linked smuggling infrastructure.
Overview of the Main Threats
The development of these phenomena has several important implications.
The first threat is that the involvement in both terrorist and criminal
activity by the same organizations implicates that these groups have a vested interest in
destabilizing countries or even whole regions through terrorist activity, in order to
ensure the survival of their criminal activity. In drug producing countries for example,
it is often to the advantage of criminal organizations to have unstable political
conditions with the resulting internal conflicts so that drug production areas controlled
by insurgent groups are free from government interference. The most striking example of
this is in Central Asia. In that region, the IMU has proven to be highly involved in drugs
trafficking and this organization controls a significant portion of the drugs transiting
through the Central Asian republics. The same problem occurs in Kosovo, where there is a
legal vacuum, which greatly benefits Albanian criminal groups. To a certain extent, this
is also true in some South American regions.
Another worrisome development is the fact that the number of countries
in which there is a strong link between organized crime and the ruling government is
increasing. This is for example the case in certain Eastern European countries. Once
criminal entities are well positioned within the state, it is extremely difficult to
reverse this situation.
From an operational perspective, the alliances between different crime
groups, which results in them growing from a national threat to a regional or global level
creates enormous problems for law enforcement. If a country is suddenly confronted with a
significant crime rate due to the presence of an ethnic group, which until then did not
constitute a threat, it will be extremely difficult to conduct investigations, recruit
informants or obtain intelligence. This problem was already observed by many Western
countries in their efforts to combat the threats posed by Russian speaking organized
crime. A lack of knowledge of Russian, including underworld "slang" and of the
cultural context in which these groups evolve have posed significant problems. It is, in
general, particularly difficult for law enforcement to detect, in an early stage, whether
a particular emigre community is used as an advance base for organized crime groups.
Moreover, due to the increased cooperation among transnational crime
groups, the threats emanating from criminal groups which are already known by law
enforcement suddenly move to a more borderless dimension. More and more investigations
will have international implications, which makes these investigations both more lengthy
and costly, and could ultimately result in less efficiency. The current difficulties of
investigating and monitoring human trafficking activities around the globe clearly
illustrate these problems.
The laundering of proceeds of crime deserves special attention, because
of its devastating effects on national economies. Money laundering prevention will remain
difficult as long as there are countries which have lax regulations or plainly refuse to
cooperate. In the light of a tendency of increasing globalization and deregulation of
international financial transactions, this issue merits special attention. In terms of
damage to the economy, special mention should be made of Russian organized crime groups.
Unlike their Italian or Colombian counterparts, they only repatriate a very small part of
their profits, but deposit most of their proceeds in foreign countries, and establish
banks in offshore havens. Furthermore, large parts of the domestic banking sector are
controlled by organized crime, partly as a result of the lack of tight regulations.
Globalization has also led to increased trade relationship between
Western societies and countries which, due to underdevelopment, have a highly unregulated
economic climate. Contract law is extremely liberal (absence of legal safeguards against
abusive clauses) and the forced execution of contracts through judicial channels is almost
non existent. This results all too often in foreign businesses having to operate in an
environment where they cannot protect their interest in a fashion they are used to
(contracts, arbitration, litigation). This presents significant opportunities for criminal
entities and a danger to the overseas economic interest of countries, including the United
States.
Conclusion and Recommendations
These findings are cause for great concern to us. In conclusion to my
statement, I would like to present the Committee with a few recommendations on how to
tackle these groups.
However, it should be obvious that the problems related to the trends I
just described cannot be solved by law enforcement on its own. On the contrary, an
integrated strategy of economic, social and legal assistance to countries which face
unstable political conditions and have severe economic problems is needed. Reform of the
banking sector in many countries should be one of the priorities. Also, administrative
procedures should be rendered more transparent and controlled through accountability
procedures, in order to avoid common bribery practices. The international community as
such has an important role in this field.
As regards the role of the law enforcement community, of which
Interpol, with its 178 member countries, is one of the rallying factors, I would like to
make the following recommendations:
1. Priority setting at the policy level
Considering the limited resources in comparison to the scope of the
problem, there is an urgent need for clear priorities to be set. This is especially true
since some of our findings clearly indicate that these threats have obvious national
security implications for several countries, not in the least for the United States.
Interpol, with its limited resources, has had to chose which projects and initiatives it
could implement at this time. I have highlighted several of these initiatives in my
remarks.
2. A more integrated approach to combating crime.
Another key element concerns the manner in which law enforcement itself
operates. All too often, drugs, organized crime and terrorism are treated as separate
issues by police authorities, and this prevents authorities from receiving a valid,
overall view of the threat. The problem lies more in the lack of an integrated
intelligence approach (i.e., collection, exchange and analysis of data), than in a lack of
international cooperation, as such. Only by combining the available data from different
agencies and countries, and setting up consultation mechanisms among different experts
from all fields, can an adequate platform to further assess the threat and to formulate
adequate counter-strategies be provided. In my opinion, the Millennium project undertaken
by Interpol under the auspices of the G-8, which I referred to earlier in my comments, is
a good example of such an approach.
3. Training and assistance
Given the difficult financial situation in many of the Interpol member
countries where the aforementioned problems originate, one of the priorities in addressing
this issue should be to provide these countries with technical assistance and expertise.
The possibility to build and share databases is a key factor to success. However, this
requires a proper information technology infrastructure that is unfortunately beyond the
financial means of many of our member countries. Training should focus on information
processing techniques and the development of an analytical capability.
My role here today was to give you an overview of the problem areas, but I
sincerely hope that my Organization will be instrumental not only in describing problems,
but also in contributing to their solution. This concludes my prepared remarks. I would be
happy to respond to any questions you may have.
